Expiration of Stimulus Funds Means Higher Costs for Higher Education

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(This post originally appeared on the States for a Transparent and Accountable Recovery blog).

A couple months ago, I detailed in this space how the end of federal stimulus support is putting the squeeze on states’ K-12 education budgets, forcing school boards across the country to grapple with teacher layoffs, larger class sizes, fewer school programs and shorter school days.  But the pain isn’t only being felt by K-12 teachers and students; it also extends to public university students and their families, many of whom are facing major hikes in tuition and fees as Recovery Act funds for higher education come to an end.

As the Pew Center on the States’ Stateline news service explains, lawmakers facing severe budget crunches have “targeted higher ed because it’s easier to cut — legally, politically and logistically — than K-12 schools, roads, prisons or health care.”  As a result, “higher education continued to bear the brunt of state budget cuts in 2011.” These cuts, necessitated in large part by the expiration of stimulus funds, have forced public colleges and universities to raise tuition rates, often dramatically:

  • As Stateline noted, state support for the University of Washington has been cut from $400 million to $200 million, causing tuition to “rise by at least 16 percent next year.”
  • State budget cuts have “prompted a 20 percent increase in tuition at Arizona State University,” according to Stateline.
  • The Associated Press reported that the Florida state legislature has “approved an 8-percent tuition increase and most if not all” of the state’s 11 public universities “are expected to seek the board’s permission for an addition 7 percent, the legal limit.”  The spending cuts, the AP notes, “are due almost entirely to the expiration of federal stimulus funding the universities have received in the current budget year.”
  • In a separate article, the AP noted that the chancellor of the Tennessee Board of Regents cited “the evaporation of federal recovery act funds” in announcing that “[s]tudents attending Tennessee colleges and universities could see a tuition increase of 9.5 percent or more this fall.”
  • As the Boston Globe recently reported, the University of Massachusetts’ Board of Trustees has approved a plan that “will increase tuition and fees by 7.5 percent, meaning the average in-state undergrad will pay $11,838, an $826 increase from the academic year that recently ended.”  According to University officials, “the fee hike was necessary mainly because a federal stimulus program, which provided $38 million in funding this year, has ended.”
  • Wright State University in Ohio has raised tuition to the 3.5 percent state cap ($273 per year) to help offset the largest reduction in state funding in the school’s history, the Dayton Daily News reported. In response to these state budget cuts, which “come mainly from a loss of federal stimulus money that was not replaced,” the University of Cincinnati has also raised tuition to the cap, Miami University and Ohio State University are expected to do the same, and less expensive community colleges are seeking state lawmakers’ approval to raise tuition rates more than 3.5 percent.

A college education has long been recognized as a path to financial security, but with tuitions on the rise, more and more prospective students may lack the resources they need to make the dream of attending college a reality. Higher costs also impact those who are struggling to find work; in periods of high unemployment like today, many people go back to school to retool and gain new skills, but higher tuition rates may take this option off the table for those with more limited means.  Then there’s the big picture: Making college less affordable seems like precisely the wrong thing to do in an increasingly competitive global economy where those nations that invest in a skilled and educated workforce have the best hopes of future prosperity.

For all of these reasons, steep tuition hikes at traditionally affordable public institutions could exacerbate our economic troubles.  But that’s precisely the situation we find ourselves in as the Recovery Act moves into the rearview mirror with no more federal support in sight.

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